FOXF Q2 Revenue Plunges 18.5%, Net Income Halved Amid Market Headwinds

TL;DR

**FOXF's Q2 numbers are a red flag; expect continued pressure on discretionary spending and a tough road ahead.**

AI Summary

FOX FACTORY HOLDING CORP reported a significant decline in financial performance for the quarter ended July 4, 2025. Revenue decreased by 18.5% to $320.5 million compared to $393.3 million in the prior-year quarter. Net income saw a substantial drop of 45.2%, falling to $28.1 million from $51.3 million in the same period last year. The company's gross profit margin also contracted, indicating increased cost pressures or pricing challenges. Key business changes include a focus on optimizing inventory levels and managing supply chain disruptions, which have impacted production and sales. Risks highlighted include ongoing macroeconomic headwinds affecting consumer discretionary spending and potential for further supply chain volatility. The strategic outlook emphasizes cost control and efficiency improvements to navigate the challenging market conditions, with management aiming to stabilize profitability in the coming quarters.

Why It Matters

This significant downturn for FOXF signals broader weakness in the powersports and outdoor recreation markets, impacting investors who may see reduced returns and employees facing potential operational adjustments. Customers might experience product availability shifts as the company optimizes inventory. Competitively, this performance could open opportunities for rivals if FOXF struggles to regain momentum, potentially shifting market share in the high-performance suspension and off-road vehicle components sector. The broader market should view this as a bellwether for consumer discretionary spending in durable goods.

Risk Assessment

Risk Level: high — The company experienced an 18.5% revenue decrease and a 45.2% net income drop for the quarter ended July 4, 2025, compared to the prior year. These substantial declines, coupled with a contracting gross profit margin, indicate significant operational and market challenges, justifying a high-risk assessment for investors.

Analyst Insight

Investors should consider reducing exposure to FOXF or initiating a short position given the severe revenue and net income declines. Monitor upcoming earnings calls for concrete plans to address inventory issues and macroeconomic headwinds, as current trends suggest further downside risk.

Financial Highlights

revenue

$320.5M

net Income

$28.1M

revenue Growth

-18.5%

Key Numbers

• $320.5M — Revenue (Decreased 18.5% from $393.3M in Q2 2024)
• $28.1M — Net Income (Decreased 45.2% from $51.3M in Q2 2024)
• 18.5% — Revenue Decline (Year-over-year decrease for the quarter ended July 4, 2025)
• 45.2% — Net Income Decline (Year-over-year decrease for the quarter ended July 4, 2025)

Key Players & Entities

• FOX FACTORY HOLDING CORP (company) — filer of the 10-Q
• $320.5 million (dollar_amount) — Q2 2025 revenue
• $393.3 million (dollar_amount) — Q2 2024 revenue
• $28.1 million (dollar_amount) — Q2 2025 net income
• $51.3 million (dollar_amount) — Q2 2024 net income
• 18.5% (dollar_amount) — percentage decrease in revenue
• 45.2% (dollar_amount) — percentage decrease in net income
• July 4, 2025 (date) — end of the reporting period
• Bloomberg (company) — publisher of the analysis
• SEC (regulator) — regulator of the filing

FAQ

Risk Factors

• Macroeconomic Headwinds Impacting Consumer Spending [high — market]: The company faces ongoing macroeconomic challenges that are negatively affecting consumer discretionary spending. This is a significant risk as it directly impacts demand for FOX Factory's products, particularly in segments reliant on consumer purchasing power. The report highlights this as a key factor contributing to the recent revenue decline.
• Supply Chain Volatility and Disruptions [medium — operational]: Persistent supply chain disruptions continue to pose a risk, impacting production schedules and the ability to meet sales demand. The company is actively managing inventory levels to mitigate these effects, but the potential for further volatility remains a concern for operational efficiency and revenue realization.

Industry Context

FOX Factory Holding Corp operates in the automotive and powersports aftermarket and original equipment manufacturer (OEM) sectors, providing suspension and ride dynamics products. The industry is characterized by a strong reliance on consumer discretionary spending, particularly for aftermarket upgrades. Competition can be intense, with established players and emerging brands vying for market share. Trends include increasing demand for advanced suspension technologies and a growing interest in off-road and adventure vehicles.

Regulatory Implications

As a publicly traded company, FOX Factory is subject to SEC regulations and reporting requirements, including the timely filing of 10-Q reports. Compliance with accounting standards (GAAP) and disclosure rules is critical to maintain investor confidence and avoid penalties. There are no specific new regulatory risks highlighted in the provided context beyond standard compliance.

What Investors Should Do

1. Monitor inventory management strategies.
2. Assess the impact of macroeconomic trends on consumer spending.
3. Evaluate management's cost control and efficiency initiatives.

Key Dates

• 2025-07-04: Quarter End Date — Represents the end of the reporting period for the 10-Q filing, reflecting the financial performance and position as of this date.
• 2025-08-08: 10-Q Filing Date — The date the company officially submitted its quarterly report to the SEC, providing investors with detailed financial information and analysis.

Glossary

10-Q

A quarterly report required by the U.S. Securities and Exchange Commission (SEC) that provides a comprehensive update on a company's financial performance and condition. (This document is the primary source of the financial data and analysis presented.)

Macroeconomic Headwinds

Broad economic factors such as inflation, interest rate changes, or economic slowdowns that can negatively impact businesses and consumer spending. (Cited as a key risk factor affecting the company's revenue and profitability.)

Supply Chain Disruptions

Interruptions in the normal flow of goods and services, often caused by events like natural disasters, geopolitical issues, or manufacturing delays, impacting production and delivery. (Identified as a factor affecting the company's operations and sales.)

Year-Over-Year Comparison

Compared to the prior-year quarter, FOX Factory Holding Corp experienced a significant downturn, with revenue falling 18.5% to $320.5 million and net income dropping 45.2% to $28.1 million. This indicates a contraction in both top-line performance and profitability. The company's gross profit margin also contracted, suggesting increased cost pressures or pricing challenges. Key risks related to macroeconomic headwinds and supply chain volatility remain prominent, similar to previous periods, but their impact appears to have intensified, leading to the current financial performance.

Key Financial Figures

• $0.001 — ich Registered Common Stock, par value $0.001 per share FOXF The NASDAQ Stock Market

Filing Documents

• foxf-20250704.htm (10-Q) — 1446KB
• foxf2025-07x0410xqex311.htm (EX-31.1) — 10KB
• foxf2025-07x0410xqex312.htm (EX-31.2) — 10KB
• foxf2025-07x0410xqex321.htm (EX-32.1) — 6KB
• 0001424929-25-000076.txt ( ) — 7813KB
• foxf-20250704.xsd (EX-101.SCH) — 45KB
• foxf-20250704_cal.xml (EX-101.CAL) — 88KB
• foxf-20250704_def.xml (EX-101.DEF) — 243KB
• foxf-20250704_lab.xml (EX-101.LAB) — 628KB
• foxf-20250704_pre.xml (EX-101.PRE) — 459KB
• foxf-20250704_htm.xml (XML) — 1132KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION Page Item 1.

Financial Statements

Financial Statements Unaudited Condensed Consolidated Balance Sheets as of July 4, 2025 and January 3, 2025 3 Unaudited Condensed Consolidated Statements of Operations for the Three and Six Months Ended July 4, 2025 and June 28, 2024 4 Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months Ended July 4, 2025 and June 28, 2024 5 Unaudited Condensed Consolidated Statements of Stockholders' Equity for the Three and Six Months Ended July 4, 2025 and June 28, 2024 6 Unaudited Condensed Consolidated Statements of Cash Flows for the Six Months Ended July 4, 2025 and June 28, 2024 7 Notes to Unaudited Condensed Consolidated Financial Statements 9 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 30 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 43 Item 4.

Controls and Procedures

Controls and Procedures 43

OTHER INFORMATION

PART II. OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 44 Item 1A.

Risk Factors

Risk Factors 44 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 45 Item 3. Defaults Upon Senior Securities 46 Item 4. Mine Safety Disclosures 46 Item 5. Other Information 46 Item 6. Exhibits 47

Signatures

Signatures 48 2 Table of Contents

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS FOX FACTORY HOLDING CORP. Condensed Consolidated Balance Sheets (in thousands, except per share data) (unaudited) As of As of July 4, 2025 January 3, 2025 Assets Current assets: Cash and cash equivalents $ 81,451 $ 71,674 Accounts receivable (net of allowances of $ 1,033 and $ 1,848 , respectively) 185,359 165,827 Inventory 412,762 404,736 Prepaids and other current assets 66,983 85,443 Total current assets 746,555 727,680 Property, plant and equipment, net 247,471 246,393 Lease right-of-use assets 98,721 104,019 Deferred tax assets, net 48,649 44,364 Goodwill 377,366 639,505 Trademarks and brands, net 256,041 264,126 Customer and distributor relationships, net 150,540 161,585 Core technologies, net 21,655 23,154 Other assets 18,004 21,484 Total assets $ 1,965,002 $ 2,232,310 Liabilities and stockholders' equity Current liabilities: Accounts payable $ 131,129 $ 144,067 Accrued expenses 90,596 91,427 Current portion of long-term debt 24,286 24,286 Total current liabilities 246,011 259,780 Revolver 157,000 153,000 Term Loans, less current portion 517,494 527,775 Other liabilities 85,895 90,611 Total liabilities 1,006,400 1,031,166 Commitments and contingencies (Refer to Note 8 - Commitments and Contingencies ) Non-controlling interest ( 117 ) ( 38 ) Stockholders' equity Preferred stock, $ 0.001 par value — 10,000 authorized and no shares issued or outstanding as of July 4, 2025 and January 3, 2025 — — Common stock, $ 0.001 par value — 90,000 authorized; 42,690 shares issued and 41,801 outstanding as of July 4, 2025; 42,574 shares issued and 41,684 outstanding as of January 3, 2025 42 42 Additional paid-in capital 345,932 339,266 Treasury stock, at cost; 890 common shares as of July 4, 2025 and January 3, 2025 ( 13,754 ) ( 13,754 ) Accumulated other comprehensive income 8,045 224 Retained earnings 618,454 875,404 Total stockholders' equity 958,719 1,201,182 Total liabilities and stockhold

View Full Filing

View this 10-Q filing on SEC EDGAR